HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

1. Industry viewpoints: <ul>
<li>A new policy was released to clarify the scope and price of medical insurance payments for online healthcare service, which help open up the market scale of digital healthcare business.</li>
<li>Currently, some of the so-called "innovative drugs" in China are still far from real innovation, such as the PD-1 market.</li>
<li>Polypeptide drugs account for a small share in the global biomedical market, but they are developing rapidly.</li>
</ul>2. Company news:News from Wondfo Biotech, CSPC and Sino Biopharm about the new products for COVID-19 antigen tests, clinical progress on new category 1 drug and the new products that pass the consistency evaluation in China.3. Market review:Last week, stock price for healthcare sector in A share decreased 1.36%, while CSI 300 increased 4.05% over the same period of time.4. Risk Disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

1. Industry viewpoints: 
A new policy was released to clarify the scope and price of medical insurance payments for online healthcare service, which help open up the market scale of digital healthcare business.
Currently, some of the so-called "innovative drugs" in China are still far from real innovation, such as the PD-1 market.
Polypeptide drugs account for a small share in the global biomedical market, but they are developing rapidly.
2. Company news:News from Wondfo Biotech, CSPC and Sino Biopharm about the new products for COVID-19 antigen tests, clinical progress on new category 1 drug and the new products that pass the consistency evaluation in China.3. Market review:Last week, stock price for healthcare sector in A share decreased 1.36%, while CSI 300 increased 4.05% over the same period of time.4. Risk Disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Gland Pharma Ltd / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/gland-pharma-ltd" target="_blank" data-smartkarma-citation="entities:29723:1" rel="noopener">Gland Pharma (7172753Z IN)</a> aims to raise around US$900m in what would be one of India’s largest IPOs in 2020. The company was established in 1978 by P.V.N. Raju. KKR invested in the company in 2014 and <a href="https://www.smartkarma.com/entities/shanghai-fosun-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:8045:1" rel="noopener">Shanghai Fosun Pharmaceutical (Group) (2196 HK)</a> bought a 74% stake in the company in 2017. Gland Pharma was one of the fastest growing generic injectables-focused companies by revenue in the United States from 2014 to 2019. GP sells its products primarily via a B2B model in over 60 countries, including US, Europe, Canada, Australia, and India. It also operates a B2C model in India.GP’s revenue has grown at 28.78% CAGR over FY18-20 and was up another 29.4% in 1Q21. At the same time, PAT margins have increased from 19.2% in FY18 to 34.2% in 1Q21. Thus, PAT has grown at 55.15% CAGR and was up another 70.6% in 1Q21. However, the company hasn’t provided a whole lot of details about the revenue breakdown for its products. In addition, not all the pre-IPO shareholders will be locked-up post listing.

Gland Pharma (7172753Z IN) aims to raise around US$900m in what would be one of India’s largest IPOs in 2020. The company was established in 1978 by P.V.N. Raju. KKR invested in the company in 2014 and Shanghai Fosun Pharmaceutical (Group) (2196 HK) bought a 74% stake in the company in 2017. Gland Pharma was one of the fastest growing generic injectables-focused companies by revenue in the United States from 2014 to 2019. GP sells its products primarily via a B2B model in over 60 countries, including US, Europe, Canada, Australia, and India. It also operates a B2C model in India.GP’s revenue has grown at 28.78% CAGR over FY18-20 and was up another 29.4% in 1Q21. At the same time, PAT margins have increased from 19.2% in FY18 to 34.2% in 1Q21. Thus, PAT has grown at 55.15% CAGR and was up another 70.6% in 1Q21. However, the company hasn’t provided a whole lot of details about the revenue breakdown for its products. In addition, not all the pre-IPO shareholders will be locked-up post listing.

Gland Pharma IPO - High on Growth but Low on Details

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<a href="https://www.smartkarma.com/entities/gland-pharma-ltd" target="_blank" data-smartkarma-citation="entities:29723:1" rel="noopener">Gland Pharma (7172753Z IN)</a> is one of the fastest-growing generic injectables-focused companies by revenue in the US from 2014 to 2019, according to IQVIA Report. Gland is backed by <a href="https://www.smartkarma.com/entities/shanghai-fosun-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:8045:1" rel="noopener">Shanghai Fosun Pharmaceutical (Group) (2196 HK)</a>, which acquired a 74% stake for around $1.1 billion in 2017. Gland has launched India’s biggest pharma IPO to raise as much as Rs64.5 billion ($871 million). It aims to list on 20 November. <div class="content-highlight">The injectable market enjoys high barriers to entry due to large capital investments, operational costs, manufacturing complexities, stricter compliance requirement and high-quality standards. Due to the high barriers to entry, consolidation is a theme as evidenced by Fosun’s acquisition of a majority stake in Gland. Notably, around 40% of the overall drug shortages in the US are in the injectables category, which underpins Gland’s opportunity. Overall, Gland has attractive fundamentals to capitalise on the market opportunity, in our view. </div>

Gland Pharma (7172753Z IN) is one of the fastest-growing generic injectables-focused companies by revenue in the US from 2014 to 2019, according to IQVIA Report. Gland is backed by Shanghai Fosun Pharmaceutical (Group) (2196 HK), which acquired a 74% stake for around $1.1 billion in 2017. Gland has launched India’s biggest pharma IPO to raise as much as Rs64.5 billion ($871 million). It aims to list on 20 November. The injectable market enjoys high barriers to entry due to large capital investments, operational costs, manufacturing complexities, stricter compliance requirement and high-quality standards. Due to the high barriers to entry, consolidation is a theme as evidenced by Fosun’s acquisition of a majority stake in Gland. Notably, around 40% of the overall drug shortages in the US are in the injectables category, which underpins Gland’s opportunity. Overall, Gland has attractive fundamentals to capitalise on the market opportunity, in our view. 

Gland Pharma IPO Initiation: Much Ado About Something

1. Industry viewpoints: 
<ul>
<li>The IVD industry in China is a great place to invest in terms of market size, industry prosperity and growth potential.</li>
<li>With the rapid aging of the population, there is an increasing need for high-quality medical and nursing care for the elderly.</li>
<li>With the gradual homogenization of China's biotechnology industry, how to seek differentiated development has become the key.</li>
</ul>
2. Company news:
News from CStone Pharmaceuticals, Reistone Biopharma, Sino Biopharm and Fosun Pharma on new licensing deals and progress on innovative drugs. 
3. Market review:
Last week, stock price for healthcare sector in A share rose 2.79%, while CSI 300 decreased 0.49% over the same period of time.   
4. Risk Disclosure:
Policy risk, R&amp;D risk, Company risk and COVID-19 risk

1. Industry viewpoints: 

The IVD industry in China is a great place to invest in terms of market size, industry prosperity and growth potential.
With the rapid aging of the population, there is an increasing need for high-quality medical and nursing care for the elderly.
With the gradual homogenization of China's biotechnology industry, how to seek differentiated development has become the key.

2. Company news:
News from CStone Pharmaceuticals, Reistone Biopharma, Sino Biopharm and Fosun Pharma on new licensing deals and progress on innovative drugs. 
3. Market review:
Last week, stock price for healthcare sector in A share rose 2.79%, while CSI 300 decreased 0.49% over the same period of time.   
4. Risk Disclosure:
Policy risk, R&amp;D risk, Company risk and COVID-19 risk

Equity Bottom-Up

Jiangsu Hengrui Medicine / Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/jiangsu-hengrui-medicine-co-ltd" target="_blank" data-smartkarma-citation="entities:14128:1" rel="noopener">Jiangsu Hengrui Medicine (600276 CH)</a> recently released the third quarter report. The Q1-Q3 accumulated revenue was RMB19.413 billion, with a YoY growth rate of 14.57%. Q1-Q3 single quarter growth rate was 11%, 14% and 17% respectively. Net income attributed to shareholders in the first three quarters was RMB4.259 billion, up 14.02% YoY. Q3 single quarter net income attributed to shareholders reached RMB1.597 billion, up 21% YoY. Q1-Q3 and Q3’s net income after deducting non-recurring gains and losses were RMB4.141 billion and RMB1.579 billion, up 17% and 27% YoY respectively. Net operating cash flow increased 53% YoY in the first three quarters. If excluding the impact of equity incentive plan, the performance in third quarter report will be even better.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/167/757/original/image_57569591631603763698845.png?1603763700" class="editor-image img-responsive" data-smartkarma-image-id="167757"></figure>Source: WIND, Hengrui’s financial report

Jiangsu Hengrui Medicine (600276 CH) recently released the third quarter report. The Q1-Q3 accumulated revenue was RMB19.413 billion, with a YoY growth rate of 14.57%. Q1-Q3 single quarter growth rate was 11%, 14% and 17% respectively. Net income attributed to shareholders in the first three quarters was RMB4.259 billion, up 14.02% YoY. Q3 single quarter net income attributed to shareholders reached RMB1.597 billion, up 21% YoY. Q1-Q3 and Q3’s net income after deducting non-recurring gains and losses were RMB4.141 billion and RMB1.579 billion, up 17% and 27% YoY respectively. Net operating cash flow increased 53% YoY in the first three quarters. If excluding the impact of equity incentive plan, the performance in third quarter report will be even better.Source: WIND, Hengrui’s financial report

Jiangsu Hengrui Medicine (600276 CH) - Q3 Performance Improved with Promising Innovative Pipeline

China

Shanghai Fosun Pharmaceutical (Group) Co., Ltd. is a pharmaceutical company. Through its subsidiaries, the Company manufactures genetic medicines, Chinese traditional medicines, diagnostic products, and medical instruments, provides technology, marketing, and advertising services, as well as invests in import and export trading.

Shanghai Fosun Pharmaceutical (Group) (2196 HK)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Shanghai Fosun Pharmaceutical (Group) (2196 HK)

China Healthcare Weekly (Nov.6)

This article summarized the new healthcare policy released in China, major industry viewpoints, company news and capital markets review for the...

Xinyao (Criss) Wang

Gland Pharma IPO - High on Growth but Low on Details

Gland Pharma aims to raise around US$900m in what would be one of India’s largest IPOs in 2020. Fosun Pharmaceutical bought a 74% stake in the...

Sumeet Singh

Gland Pharma IPO Initiation: Much Ado About Something

Gland has launched India’s biggest pharma IPO to raise as much as Rs64.5 billion ($871 million). Gland has attractive fundamentals to capitalise on...

Arun George

China Healthcare Weekly (Oct.30)

This article summarized major industry viewpoints, companies news and capital market review in healthcare industry in China during the week of Oct.30.

Xinyao (Criss) Wang

Jiangsu Hengrui Medicine (600276 CH) - Q3 Performance Improved with Promising Innovative Pipeline

This article analyzed Hengrui's Q3 performance, strengths in innovation, promotion and internationalization, as well as its forecast and rating.

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)